China National Petroleum Corp (CNPC), a leading buyer of Venezuelan oil, has canceled plans to load about 5 million barrels worth of Venezuelan oil in August following the latest set of US sanctions on the South American exporter, reported Bloomberg and Reuters citing sources with knowledge of the matter.
On Aug. 5, Trump signed an executive order authorizing sanctions on anyone who provides support to Maduro. Opposition leader Juan Guaido, recognized by the Trump administration as the country’s leader, is backed by more than 50 countries.
CNPC joins Turkey’s largest bank, Ziraat Bank, which severed its relationship with Venezuela’s Central Bank following sanctions.
China became the top destination for Venezuelan crude after US sanctions against state-owned Petroleos de Venezuela SA were announced at the end of January aimed at unseating socialist President Nicolas Maduro, whose re-election in 2018 is viewed by much of the Western Hemisphere as illegitimate.
This will be the first time in more than a decade that PetroChina forgoes Venezuelan crude, according to data compiled by Bloomberg.
The executive order Trump issued on Aug. 5 did not explicitly sanction non-US companies that do business with Venezuela’s state-run company PDVSA, including partners in crude operations like France’s Total SA, Norway’s Equinor ASA, as well as Russian and Chinese customers.
CNPC will wait for more guidelines from the US Treasury before further moves in dealing with Venezuelan oil, according to the reports.
It’s reported that the suspension followed recent communications between the US and Chinese governments, including a meeting between US embassy officials in Beijing and top management at CNPC.
For the first six months of this year, China imported 8.67 million tonnes of crude oil from Venezuela, or roughly 350,000 barrels per day, about 3.5 per cent of its total imports, according to Chinese customs data.